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The fate of proposed Rs 4,000-crore greenfield automobile project of French auto major PSA Peugeot Citroen seems to be hanging in the balance as the company has surrendered 33% of the land kept reserved for the project at Sanand — an emerging auto hub — in Ahmedabad district. The state government has in turn sold off this parcel of land.

“A few months back, the company had issued a letter to the state government, surrendering a portion of the land that measures about 200 acres. This parcel of land was kept reserved for any future expansion for Peugeot,” said a senior state government official.

“This 200 acres of land has now been sold to private firms wanting to set up operations in Sanand,” added the official.

The second largest European car manufacturer had proposed to roll out its first car from the Sanand plant ? the high-end C-segment model 508 ? in 2014 with a total production capacity of 1.7 lakh vehicles in the first phase of the project. The company was given around 600 acres of land in Sanand GIDC for this purpose.

Peugeot’s initial plan also included setting up an engine/gearbox plant at Sanand to which the company proposed to add a suppliers’ park with an investment of Rs 4,000 crore.

The land offered to Peugeot lies next to the upcoming manufacturing plant of Ford Motors.

When contacted, Peugeot evaded the question of surrender of land and stated in an e-mail sent to The Indian Express earlier that it was rescheduling the construction operations at the Sanand production facility.

The automobile plant was supposed to create 5,000-odd jobs. Peugeot and the government also had plans to set up an automotive skills development institute at Sanand, which already has the likes of Tata Nano and Ford.

According to government officials, the company is yet to make the initial payment for the 600 acres of land that was allotted to it over a year ago.

The state support agreement (SSA) between the government and Peugeot was signed on September 1, 2011. On November 3, 2011, the company had held the ground-breaking ceremony at the plant in the presence of its top officials.

Last year, the company had also shifted its office from Mumbai to Ahmedabad.